What is the main aim of an insurance company?

The main aim of an insurance company is to manage risk and provide financial protection. Insurance serves as a mechanism for individuals and businesses to mitigate the financial impact of unforeseen events, such as accidents or natural disasters. By pooling premiums from policyholders, an insurance company can offer coverage and support to those who experience losses, thus fulfilling its role in risk management.

While maximizing profit for shareholders is a significant aspect of running any business, including insurance companies, it is not the primary aim. Insurance companies operate within a framework that emphasizes their responsibility to policyholders first, as their success hinges on effectively managing risks and ensuring financial stability for those they insure.

Managing operating costs and promoting insurance education, while important, are means to support the larger goal of risk management and financial protection. These functions contribute to the overall efficiency and effectiveness of the insurance provider but do not encapsulate the fundamental purpose of the business.